Four Dangers of Bank Debit Cards
Credit cards are useful for a variety of purchases - hotel reservations, car rentals, airline tickets, etc. Many people realize the importance of keeping low consumer debts, and to eliminate the temptation to spend, some people remove credit cards from their wallet and carry a debit card. Since the majority of bank debit cards have either a Visa or MasterCard logo, these can be used at many major retailers, and they can take the place of credit cards. You can use a Visa logo debit card to buy a plane ticket, reserve a hotel room, and much more. And since the funds are drafted from your personal bank account, you don't have to worry about debt accumulation. Yet, there are a few disadvantages or dangers associated with debit cards.
1. Fraud Charges: Once debit card danger involves fraudulent charges. Though fraud purchases can occur on a credit or debit card, if a person steals your credit card and goes on a shopping spree, their action won't impact your pocket. On the other hand, if someone steals your debit card and completely wipes out your bank account, this can create a chain reaction, wherein checks start to bounce and you receive multiple overdraft fees. While banks are prepared to reimburse the stolen money, it can take up to 10 days to have your account credited. Plus, you have to contact your personal creditors and explain the situation.
2. Merchant Errors: Have you ever purchased an item and had the merchant charge you twice for the same purchase - I have! Merchants make mistakes, and sometimes a consumer is doubled charged for a high ticketed item. Again, if the consumer used a credit card to buy the item, they aren't immediately affected. Then again, if a bank debit card is used to pay for the item, their account might reflect a "red balance."
3. Doesn't Report Good Credit History: Some people completely avoid credit cards as a way to stay out of debt. Staying debt free is an excellent goal. However, if you want to build credit and maintain a high score, you have to use some credit. It is always a good idea to have at least one emergency credit card. Plus, if you want to increase a low credit score, making a few small purchases each month and paying off the balance within one - two months is an effective and quick way to boost a low score.
4. Extra Fees: If you use a bank debit card regularly, keep an open eye for extra fees. Some credit unions and banks charge $.75 to $1.50 for every debit purchase. Yet, there is an easy way to avoid this fee. After swiping your debit card at a retail store or gas station, the machine will prompt you to choose "debit" or "credit." If your debit card has a Visa or MasterCard logo, select the "credit" option. The money will be drafted from your bank account, but your bank will view the transaction as a credit purchase and you will not incur a fee.
